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SIGNIFICANT ACCOUNTING POLICIES (Tables)

6 Months Ended

Jun. 30, 2020

Our total revenues during the three and six months ended June 30, 2020 and 2019 are presented in the table below based on an allocation of the estimated transaction price with the patient between the primary patient classification of insurance coverage (in thousands):



	Three Months Ended June 30,				Six Months Ended June 30,
	2020		2019		2020		2019
Commercial insurance	$	96,349	$	160,185	$	251,711	$	311,899
Medicare	35,082		60,151		92,587		114,280
Medicaid	4,300		7,295		10,980		14,423
Workers' compensation/personal injury	7,359		11,014		17,916		22,062
Other patient revenue	3,549		6,017		9,217		11,858
Management fee revenue	3,332		1,753		5,899		3,870
Teleradiology and Software revenue	2,200		4,063		5,971		8,449
Other	3,527		7,693		9,750		14,003
Service fee revenue	155,698		258,171		404,031		500,844
Revenue under capitation arrangements	34,868		30,926		68,099		59,803
Total revenue	$	190,566	$	289,097	$	472,130	$	560,647

Schedule of goodwill and other intangible assets

Activity in goodwill for the six months ended June 30, 2020 is provided below (in thousands):



Balance as of December 31, 2019	$	441,973
Goodwill acquired through the acquisition of Olney Open MRI, LLC	601
Goodwill acquired through the acquisition of MRI at Woodbridge, LLC	1,833
Goodwill acquired through the acquisition of DeepHealth, Inc.	23,396
Balance as of June 30, 2020	$	467,803

Effect of derivative instruments on comprehensive income

A tabular presentation of the effect of derivative instruments on our consolidated statement of comprehensive loss of the 2019 swaps which remain effective is as follows (amounts in thousands):



For the three months ended June 30, 2020
Account	April 1, 2020 Balance			Amount of comprehensive loss recognized on derivative net of taxes			Amount of loss reclassified out of accumulated OCI into income (prior period effective portion)		June 30, 2020 Balance			Location
Accumulated Other Comprehensive Loss, net of taxes	$	(24,699	)	$	(599	)	$	892	$	(24,406	)	Liabilities and Equity



For the six months ended June 30, 2020
Account	January 1, 2020 Balance			Amount of comprehensive loss recognized on derivative net of taxes			Amount of loss reclassified out of accumulated OCI into income (prior period effective portion)		June 30, 2020 Balance			Location
Accumulated Other Comprehensive Loss, net of taxes	$	(5,870	)	$	(19,428	)	$	892	$	(24,406	)	Liabilities and Equity

A tabular presentation of the effect of derivative instruments on our statement of operations of the 2019 Swaps for the Swaps that became ineffective during the second quarter is as follows (amounts in thousands):



For the three months ended June 30, 2020
Ineffective interest rate swap	Amount of loss recognized in income on derivative (current period ineffective portion)			Location of loss recognized in Income on derivative (current period ineffective portion)	Amount of loss reclassified from accumulated OCI into income (prior period effective portion)			Location of gain (Loss) reclassified from accumulated OCI into income (prior period effective portion)
Interest rate contracts	$	(3,843	)	Other income (expense)	$	(892	)	Interest income (expense)

A tabular presentation of the effect of derivative instruments on our consolidated statement of comprehensive loss of the 2016 Caps is as follows (amounts in thousands):



For the three months ended June 30, 2020
Account	April 1, 2020 Balance		Amount of comprehensive gain recognized on derivative net of taxes	June 30, 2020 Balance		Location
Accumulated Other Comprehensive Loss, net of taxes	(1,597	)	188	(1,409	)	Liabilities and Equity



For the six months ended June 30, 2020
Account	January 1, 2020 Balance		Amount of comprehensive gain recognized on derivative net of taxes	June 30, 2020 Balance		Location
Accumulated Other Comprehensive Loss, net of taxes	(1,877	)	468	(1,409	)	Liabilities and Equity

Schedule of fair value of assets and liabilities

The table below summarizes the estimated fair value compared to our face value of our long-term debt as follows (in thousands):



	As of June 30, 2020
	Level 1		Level 2		Level 3		Total Fair Value		Total Face Value
First Lien Term Loans and SunTrust Term Loan	$	—	$	650,954	$	—	$	650,954	$	684,051



	As of December 31, 2019
	Level 1		Level 2		Level 3		Total		Total Face Value
First Lien Term Loans and SunTrust Term Loan	$	—	$	708,948	$	—	$	708,948	$	705,699

The tables below summarize the estimated fair values of certain of our financial assets that are subject to fair value measurements, and the classification of these assets on our condensed consolidated balance sheets, as follows (in thousands):



	As of June 30, 2020
	Level 1		Level 2		Level 3		Total
Current and long term liabilities
2016 caps - Interest Rate Contracts	$	—	$	446	$	—	$	446
2019 swaps - Interest Rate Contracts	$	—	$	39,304	$	—	$	39,304



	As of December 31, 2019
	Level 1		Level 2		Level 3		Total
Current and long term liabilities
2016 caps - Interest Rate Contracts	$	—	$	1,081	$	—	$	1,081
2019 swaps - Interest Rate Contracts	$	—	$	9,477	$	—	$	9,477

Earnings per share

Earnings per share is based upon the weighted average number of shares of common stock and common stock equivalents outstanding, net of common stock held in treasury, as follows (in thousands except share and per share data):



	Three Months Ended June 30,					Six Months Ended June 30,
	2020			2019		2020			2019
Net loss (income) attributable to RadNet, Inc.'s common stockholders	$	(10,594	)	$	4,899	$	(26,952	)	$	1,165

BASIC AND DILUTED NET (LOSS) INCOME PER SHARE ATTRIBUTABLE TO RADNET, INC.'S COMMON STOCKHOLDERS
Weighted average number of common shares outstanding during the period	50,672,219			49,702,869		50,483,274			49,490,234
Basic and diluted net (loss) income per share attributable to RadNet, Inc.'s common stockholders	$	(0.21	)	$	0.10	$	(0.53	)	$	0.02

DILUTED NET INCOME PER SHARE ATTRIBUTABLE TO RADNET, INC.'S COMMON STOCKHOLDERS
Weighted average number of common shares outstanding during the period	50,672,219			49,702,869		50,483,274			49,490,234
Add nonvested restricted stock subject only to service vesting	—			134,260		—			186,779
Add additional shares issuable upon exercise of stock options and warrants	—			307,411		—			311,023
Weighted average number of common shares used in calculating diluted net income per share	50,672,219			50,144,540		50,483,274			49,988,036
Diluted net income per share attributable to RadNet, Inc.'s common stockholders	$	(0.21	)	$	0.10	$	(0.53	)	$	0.02

Investment in joint ventures

The following table is a summary of our investment in joint ventures during the six months ended June 30, 2020 (in thousands):



Balance as of December 31, 2019	$	34,470
Equity in earnings in these joint ventures	2,900
Balance as of June 30, 2020	$	37,370

Joint venture investment and financial information

The following table is a summary of key balance sheet data for these joint ventures as of June 30, 2020 and December 31, 2019 and income statement data for the six months ended June 30, 2020 and 2019 (in thousands):



Balance Sheet Data:	June 30, 2020			December 31, 2019
Current assets	$	32,318		$	27,427
Noncurrent assets	67,307			61,037
Current liabilities	(10,677		)	(9,217		)
Noncurrent liabilities	(22,572		)	(18,872		)
Total net assets	$	66,376		$	60,375

Book value of RadNet joint venture interests	$	30,894		$	28,001
Cost in excess of book value of acquired joint venture interests and other	6,476			6,469
Total value of Radnet joint venture interests	$	37,370		$	34,470

Total book value of other joint venture partner interests	$	35,482		$	32,374



Income statement data for the six months ended June 30,	2020		2019
Net revenue	$	43,849	$	55,624
Net income	$	6,001	$	8,723